Attachment 6Subject:
Attachments:
Agenda Item #6 - Fund Balance Resolution
Attach ment_1_to_Item_6_Bartel_PERS_16-06-30_valuation_review 32.pdf
From: Phil Koen [maiito:pkoen@ monteroPartner_;;.com]
Sent: Monday, December 17, 2018 11:10 AM
To: Rob Rennie; BSpector; Marico Sayoc; Marcia Jensen; Steven Leonardis
Cc: jak vannada; _r;�e,."'' V.; Rick Tinsley; Laurel Prevetti; Robert Schultz
Subject: Agenda Item #6 Fund Balance Resolution
Dear Town Council Members,
I failed to attach the couple of pages from the Bartels report to my earlier email on this agenda item which are very
relevant to the discussion. As Mr. Bartel shared in his "in person" discussion with the Town Council a number of months
ago, the single best action the Town Council can take is to pay down the pension liability. Here are the relevant pages
from his report that discuss this.
Again, I will be attending the Council Meeting on Tuesday, and will be available to answer any questions you have
regarding our recommendation.
Phil Koen
1
PREFUNDING OPTIONS
Where Do You Get the Money?
• One -Time Amount
• Town resolution to use one-time funds
• Annual Amounts
• Earmark annual additional funding
• Borrow from General Fund
• Pay General Fund back like loan
• Pension Obligation Bond
• Often considered an interest arbitrage between expected pension fund earnings
and interest rate paid on bond
• No guaranteed savings
• PEPRA prevents contributions from falling below the normal cost
;4 1) April 24, 2018 61
PREFUNDING OPTIONS
Where Do You Put the Money?
• Payments Directly to Ca1PERS
• Additional contribution
➢ Immediate UAL and contribution impact
➢ Retains contribution volatility
• Request single shorter amortization period
➢ Fresh start UAL amortization
➢ Greater short-term payments
➢ Less interest and smaller long-term payments
• Target specific amortization bases
➢ Pay off shorter period amortization bases, greater short-term contribution
reduction, less interest savings
➢ Pay off longer amortization period bases, smaller short-term contribution
reduction, greater interest savings
' April 24, 2018
62